Toyota to roll out by 2010 small car designed for Indian market

By IANS,

Bangalore : The Indian arm of global automobile giant Toyota Motor Corporation will roll out by 2010 an innovative small car designed specially for the Indian market, a top official of Toyota’s Indian subsidiary said here Thursday.


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“India will be the first country where Toyota will launch an innovative compact car. The car is being designed specially for the local market,” Vikram Kirloskar, vice-chairman of Toyota’s Indian arm, Toyota Kirloskar Motor Ltd, told reporters.

The decade-old Indian joint venture of the Japanese automaker is building its second plant at Bidadi, about 40 kilometres from India’s IT hub here, with an upfront investment of Rs.14 billion ($329 million) to manufacture a range of passenger cars and multi-utility vehicles.

Karnataka chief minister B.S. Yeddyurappa unveiled the foundation stone for the new plant that will have a test track and additional space for suppliers and other vendors.

The modular plant, to be commissioned by 2010, will have an installed capacity of 100,000 units annually and will employ about 2,400 people.

“Though the new facility will be built to manufacture three-four models, an overwhelming part of the capacity will be used to produce the small car first,” Kirloskar said on the sidelines of the event.

The small car will be different from Toyota’s existing models in the same segment, as it is being designed exclusively for the Indian market which witnessed a phenomenal growth over the last decade, driven by a buoyant economy and an aspiring middle class with increasing purchasing power.

“We are working on the new design. The model is yet to be finalized. We plan to have petrol as well as diesel versions. The small car will not compete with the upcoming Nano of Tata Motors, touted to be the world’s cheapest car,” Kirloskar said.

Toyota’s senior managing director Akira Okabe said the subsidiary would introduce “monozukuri” culture in its Bangalore plant to combine production technologies based on the Toyota Production System and its own human resources development processes.

“We want to contribute to the growth of India through innovative activities in Karnataka. We will double the investment in the second plant to bring out a range of cars and utility vehicles in different segments,” Okabe said.

The additional investments will be made in tools and dyes whenever new models are introduced.

The adjacent first plant, with 60,000 units per annum capacity, manufactures multi-utility vehicle Innova and sedan Corolla in the luxury segment. It employs about 2,800 people.

Toyota has cumulatively invested Rs.20 billion ($470 million) in the subsidiary along with the Pune-based Kirloskar group as its partner.

Toyota holds 89 percent of the equity, while Kirloskars the remaining 11 percent stake.

Toyota ships Camry in the mid-segment and Prado, a sports utility vehicle, from its manufacturing facilities in Japan in CKD (completely knocked down) version and assembles them for the Indian market.

Toyota also manufactures transmission kits (gear boxes) for its global production facilities from its sister concern – Toyota Kirloskar Auto Parts Ltd – located near the first plant. The installed capacity is 630 units per day.

“We want to leverage the expertise developed in making transmission kits to set up an engine plant in the future,” Kirlosakar noted.

The subsidiary posted a turnover of Rs.36 billion ($847 million) in the last fiscal (2007-08) as against Rs.29 billion ($682 million dollars), registering 24 percent growth year-on-year.

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